very few of us have legitimate servers, but that doesn't mean you can't run the server client from your computer.
the more RAM you can devote to the server the better, but you probably dont want to go under 1.5 gigs if you want multiple people to play
if you're running it on the same computer as you run minecraft you have to consider that minecraft will be eating a lot of your memory even without the server. depending on your settings it can use as much as (estimate) 2 gigs and as little as half a gig
since most modern laptops have at least 4 gigs and desktops are 6ish base that shouldnt be too rough. just close itunes first.
next step is to install the server
installi like bukkit a lot. mostly because of the plugins that can go with it, i'll be making another post about my favorite one later.
plugin list- how to install plugins:
first run the server
wait a few seconds for everything to finish loading
type "stop" (minus the quotes) into the server console to stop the server
you need to do this so it can generate the properties for the current plugins
now we'll get the plugin ready
download the file from the plugins page
if its a .zip, unzip it so you have a .jar (or .jar's)
leave the .jar alone
back to the server side of things
all thats left is change server properties
congrats you have installed a superdy niftay server plugin. enjoi
to clarify, if a server has a plugin installed, its available for use for all players -- they do not need to do anything to be able to use it. they can only use it on the server where its installed (and they are given access to it)
EDIT: 512mb will cover about 5 players as long as they are in the same general chunk zone as eachother.